Incentives

The Free Trade Zone Regime is the mainstay of Bangladesh export and investment promotion strategy. It is a set of incentives and benefits granted by the Bangladesh government to companies making new investments in the country and it provides tax incentives.

Companies that may apply for the Free Trade Zone System Regime:

EXPORT SERVICES COMPANIES50% of services
must be exported

SCIENTIFIC RESEARCHFIRMSEither companies or organizations

STRATEGIC SECTORSOR COMPANIESOutside the Greater Metropolitan Area

SIGNIFICANTSUPPLIERS40% of sales to FTZ companies

List of incentives granted:

Bangladesh´s tax incentives and benefits are standardized. They apply to any and all companies according to their operation, so there is no need for negotiation on a per case basis. In addition, entities wishing to set up operations in areas outside the Greater Industrial Area can enjoy greater benefits. Discover the option according to your needs.

Incentives & Benefit for Developers:

TAX HOLIDAY

Income tax exemption on income derived from the business development of EZ in a block of 10 years in 15 years. After expiry of 10th year tax exemption will be 70% in 11th year and 30% in 12th year. But the tax exemption will not be applicable from 13th year.

VAT ON
ELECTRICITY

Exemption of VAT on electricity or taxes on sale, of self generated or purchased electric power for use of processing area of EZ (for 10 years).

FDI Magazine of The Financial Times in March 2010 conducted a competition entitled “Global Ranking Competition of Economics Zones” based on the following nine categories of ranking:

Best Overall Global Special Economic Zone

Best Economic Potential

Best Cost Effectiveness

Best Facilities

Best Transportation Link

Best Incentives

Best Promotion

Best Airport

Best Port

In the competition out of 700 Economic Zones globally 200 participated in the competition. All the zones were evaluated on a 10 point scale on the basis of some set criteria. Among the top 10 of the two categories Chittagong Export Processing Zone, Bangladesh scored 3rd position in the “Best Cost Effectiveness” and also 4th position in the “Best Economic Potential” for 2010-2011.

The broad investment climate of Bangladesh is very much conducive to investors. The successive government of Bangladesh has given highest priority in augmenting private investment in Bangladesh. The regime is considered as the most competitive in South Asia. There is no restriction on the amount of share of investment. Foreign investors are eligible to take advantage of a wide range of generous tax concessions and other fiscal incentives and facilities. Investment in Bangladesh is secure vis-à-vis nationalization and expropriation. To facilitate investment Bangladesh is signatory to Multilateral Investment Guarantee Agency (MIGA) of the World Bank Group, Overseas Private Investment Corporation (OPIC) of USA and International Centre for Settlement of Investment Disputes (ICSID) and also a member of World Association of Investment Promotion Agencies

Exemption from tax of newly established industrial undertakings set up between the period of July, 2011 and June, 2 [2019], etc. in certain cases. ( as per SECTION 46B of the Income Tax Ordinance, 1984)

Income, profits and gains from an industrial undertaking set-up in Bangladesh
between the first day of July, 2011 and the thirtieth day of June, 2019 (both
days inclusive) shall be exempted from the tax payable under this Ordinance
for the period, and at the rate, specified below:

Income, profits and gains from an industrial undertaking set-up in Bangladesh between the first day of July, 2011 and the thirtieth day of June, 2019 (both days inclusive) shall be exempted from the tax payable under this Ordinance for the period, and at the rate, specified below:

Fiscal-and-Non-Fiscal-Incentives

Bangladesh offers some of the world’s most competitive fiscal non-fiscal incentives. BOI can advise further on this matter. In summary and in most cases, these amount to the following: Remittance of royalty, technical know-how and technical assistance fees. Repatriation facilities of dividend and capital at exit. Permanent resident permits on investing US$ 75,000 and citizenship on investing US$ 500,000.

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Fiscal Incentives

1. 10 years tax holiday for the Industries to be established before 1st January, 2012 and Industries to set up after 31st December, 2011 tax holiday period will be:

The Bangladesh Investment Development Authority (BIDA) was established in 2016 by the Bangladesh Investment Development Authority Act, 2016 to encourage investment in private sector, to identify the hindrance of investment and provide necessary facilities and assistance in the establishment of industries. The wide range of services BIDA provides include investment promotion and facilitation covering support, suggestion and aftercare support to the investors. The prime vision of BIDA is to promote domestic and foreign investment as well to enhance international competitiveness of Bangladesh and contribute to overall social and economic development of Bangladesh.